Explain capacity factor and why it differs between coal, gas, wind, and solar.

• A. Capacity factor equals actual energy output divided by maximum possible output; fossil plants can run continuously, renewables depend on resources.
• B. Capacity factor is the maximum possible output; all technologies have 100% capacity factor.
• C. Capacity factor is the ratio of installed capacity to demand; renewables always have higher factors.
• D. Capacity factor is the same as efficiency; higher efficiency implies higher capacity factor.

Answer: (A)

Capacity factor tells you how much energy a plant actually produces over a period compared with how much it would produce if it ran at its full nameplate capacity the entire time. This matters because different technologies have different ability to run continuously. Fossil plants like coal and gas can operate to meet demand for long stretches when fuel is available and the grid needs power, so they often produce energy closer to their maximum potential and thus have higher capacity factors. Wind and solar, on the other hand, depend on weather and daylight: wind speeds vary, sun availability changes with time of day and season, and panels can’t generate at night or during heavy cloud cover. That variability means the actual output tends to be well below the installed capacity, yielding lower capacity factors on average. So the statement that capacity factor equals actual energy output divided by maximum possible output, while noting that fossil plants can run continuously and renewables depend on resources, best captures both the definition and why the numbers differ across technologies.

The other ideas aren’t correct because capacity factor isn’t the maximum possible output by itself, it isn’t a measure of installed capacity relative to demand, and it isn’t the same as efficiency.